Home prices rise in January, best yearly increase since 2006: S&P

Reuters Staff

2 Min Read

NEW YORK (Reuters) - Single-family home prices rose in January, starting the year with the biggest annual increase in six-and-a-half years in a fresh sign the housing market recovery remains on track, a closely watched survey showed on Tuesday.

Newly constructed single family homes are shown for sale in San Diego, California March 25, 2013. REUTERS/Mike Blake

The S&P/Case Shiller composite index of 20 metropolitan areas gained 1 percent month-on-month in January on a seasonally adjusted basis, topping expectations for 0.9 percent. Prices have been gaining since last February.

On a non-seasonally adjusted basis, prices rose 0.1 percent.

Prices in the 20 cities climbed 8.1 percent year-over-year, also beating expectations for 7.9 percent. It was the biggest yearly increase since June 2006, when housing prices were on their way down as the market was starting to collapse.

Average home prices were back to their autumn 2003 levels, though that still leaves them down about 30 percent from the 2006 peak.

All of the 20 cities showed gains on a yearly basis, with New York rising for the first time in over two years. Phoenix continued the strong rebound seen last year, rising 23.2 percent from the year before.

Eight cities racked up double-digit gains, including San Francisco, up 17.5 percent, and Las Vegas, up 15.3 percent.

The dollar slightly pared losses against the euro shortly after the data, while Treasures prices held steady at lower levels. U.S. stock index futures saw little reaction and Wall Street was poised to open higher.

The housing market got back on its feet last year as prices rose, inventories tightened and sales improved. Stimulus efforts from the Federal Reserve are also keeping mortgage rates at historically low levels, which has helped spur demand.

That momentum carried into 2013 and data last week showed home resales hit a three-year high in February.